Small financial changes can have big impact on stress, study finds

New research is shedding light on the factors surrounding financial stress, showing that even small changes in income or expenses can significantly affect how stressed people feel, both at home and at work.

“Financial stress has hills and valleys as you move through the month or maybe even the week,” said Dr. Ian Hughes, assistant professor in the Department of Psychological and Brain Sciences at Texas A&M University. “It seems like financial stress is something that moves, at least to some degree.”

Hughes led a study that tracked 324 U.S. workers for nine weeks, collecting nearly 3,000 weekly observations. Contrary to traditional assumptions that financial stress is a fixed condition, the findings reveal that it fluctuates, with weekly income, expenses, debt repayment and overspending playing major roles.

The study, published in the Journal of Business and Psychology, found that modest increases in weekly income or reductions in expenses provided immediate relief from stress — sometimes as much as large windfalls or bonuses.

“The results that we were seeing were driven primarily by smaller quantities of money rather than large quantities,” Hughes said.

The effect of overspending was also stronger in the lower margins, with people more likely to be stressed by smaller amounts — such as expenses related to social events — than more major but purposeful expenses, such as a medical cost or automotive repair.

Hughes said there seems to be a sort of “cognitive acceptance” to over-budget spending for things that are necessary rather than things that might be reflective of bad choices.

The findings challenge the assumption that financial stress is simply about having enough money. Instead, it’s shaped by small fluctuations in finances and the effort required to manage them. This insight highlights the importance of recognizing and addressing both personal financial habits and workplace practices that support financial health.

Large bonuses and major pay increases had diminishing returns after certain thresholds. Financial stress was driven more by smaller, unexpected amounts rather than big payouts that could be anticipated.

Financial stress can spill over into the workplace, affecting relationships, engagement and overall well-being.

Hughes emphasized that solutions exist at both the individual and institutional levels. On the personal side, budgeting and financial planning can help. For employers, supporting financial wellness through incremental bonuses or debt consolidation programs can make a meaningful difference.

“Simply getting paid what you’re used to getting paid does not have an impact on your stress; how you use that money does,” Hughes said.

By Valeria Kolster, Texas A&M University Division of Marketing and Communications